At the moment, you can follow either of these two methods to transfer money abroad from your Savings Account – A Wire Transfer (online) or through a Foreign Currency Demand Draft (offline).
To send money to a bank abroad using your Savings Account, you can make use of SWIFT (Society for Worldwide Interbank Financial Telecommunication), which is a quick and efficient online wire transfer option. However, the bank that you will be wiring the money to should be able to facilitate this transaction.
Procedure to use SWIFT:
Get the SWIFT number and international bank account number (IBAN) of both your own account and the account you will be transferring your money to.
Fill in the forms used for remittances, A2 Application and Declaration form, clearly mentioning the beneficiary bank’s SWIFT code (these forms are now available online and can be filled from the comfort of your home).
Following the forms submission and transaction approval, the beneficiary should receive the amount within 2-3 working days.
Remember that the funds transfer process can be delayed due to public holidays, bank holidays and weekends, both at the beneficiary’s account as well as the sender’s account end.
The National Electronic Funds Transfer (NEFT) is one of the most popular ways of real-time funds transfer. However, since it supports only national funds transfers, you can use it to transfer money only to India-based accounts. Nepal is the only foreign country that supports NEFT transfers. But before opting for NEFT, check the arrangement between the local bank and the overseas bank.
If you feel uneasy about transferring money online, you can opt for the traditional money transfer method by depositing a Foreign Currency Demand Draft. This is available for most currencies like the US Dollar, Euro, and Pound Sterling etc. Demand draft transfers, however, take longer (10-12 working days). During financial emergencies, it is, therefore, advisable to opt for wire transfers to save time.
Before zeroing in on a mode of transfer, consider the charges that it will entail. A wire transfer by virtue of its speed will naturally be costlier than a demand draft. While a wire transfer costs anything between Rs. 500-800 per transaction excluding taxes, a demand draft for the same transaction will incur charges between Rs. 200-500 plus taxes.
Some banks do not have the SWIFT facility so you will need to make a demand draft and hand it over to a bank offering this facility. In this case, as a remitter, you will have to bear the SWIFT and demand draft charges to the issuing bank.
Specialised money transfer services like the Western Union usually levy higher charges, almost 25% – 30% more than most banks. However, Western Union completes the transfer process in about 30 mins and the beneficiary can receive the money from any registered Western Union location.
Their exchange rates though may not be the most competitive, so before deciding on an option, you may want to shop for the best rates. Look out for add-on charges like service tax on every transaction.
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